Has Apple Stock Peaked?
Saudi Arabia’s giant oil company Saudi Aramco took that honor from Apple Wednesday, when Aramco’s market-cap stood at $2.43 trillion, compared to $2.37 trillion for Apple.
Aramco shares trade on the Saudi Tadawul stock exchange in riyals. The company has benefited from the rise in oil prices this year. U.S. oil prices have climbed 42% year to date. At the same time, Apple has suffered from supply chain turmoil in China.
“You can’t compare Apple to Saudi Aramco in terms of their businesses or fundamentals,” James Meyer, chief investment officer at Tower Bridge Advisors, told Bloomberg. “But the outlook for the commodity space has improved. They’re the beneficiaries of inflation and tight supply.”
Morningstar on Apple
Meanwhile, Morningstar analyst Abhinav Davuluri thinks Apple is overvalued. He puts fair value at $130, compared to the company’s recent quote of $142.32.
Apple’s results for the quarter ended March 26 “came in ahead of our estimates, despite supply chain constraints and the ongoing chip shortage,” Davuluri wrote in a commentary.
“Demand for the firm's latest iPhone 13 and MacBook Pro drove record iPhone and Mac revenue for the March quarter.”
Going forward, “we remain positive on Apple's ability to extract sales from its installed base via new products and services,” he said.
“However, management expects June-quarter revenue to be $4 billion-$8 billion lower than usual.” That’s “because of supply constraints stemming from Covid-19-related disruptions, the ongoing chip shortage, softer customer demand in China, foreign exchange headwinds, and a pause of sales in Russia.”
Going forward, “we believe the recent stretch of strong revenue growth will be difficult to maintain as Covid-19-related Mac and iPad demand subsides,” Davuluri said.